Unlike a market economy, a command economy uses
(A)more centralized planning in economic decision making
(B)consumer sovereignty to make production decisions
(C)its resources more efficiently
(D)price signals in economic decision making
(E)the popular vote in making resource allocation decisions
In a mixed economy, what to produce and how much to produce are determined by
(A)a central planning agency
(B)a private planning agency
(C)an international planning agency
(D)markets and the government
(E)large corporations and small entrepreneurs
Which of the following is necessary in a well-functioning capitalist economy but not in a command economy?
(A)Centralized decision making
(B)Scarcity of resources
(C)Monopolies
(D)Protection of property rights
(E)Positive externalities
Which of the following is true in a capitalist economy?
(A)The factors of production are collectively owned.
(B)The factors of production are distributed according to needs.
(C)The prices of goods and services are usually determined by the government.
(D)The prices of goods and services are set so that an equitable distribution of private property is achieved.
(E)Prices serve as incentives for factors of production to move to the markets where they are most valued.
The fundamental difference between a market economy and a command economy lies in which of the following?
(A)Property rights and protection of private property
(B)Absolute and comparative advantages
(C)Specialization and trade
(D)Taxes and subsidies
(E)Positive and negative externalities
Which of the following is the defining characteristic of a capitalistic economy?
(A)Well-functioning capital markets
(B)Private ownership and protection of property rights
(C)Fair distribution of income and low income taxes
(D)Equality of opportunity
(E)Efficient allocation of resources